- 28 -
deductions for maintenance expenses or depreciation connected
with the properties. Also, on their tax returns, they treated
all of their interest deductions for 1996–99 and most of those
deductions for 2000–02 as home mortgage interest rather than as
investment interest.
In short, the evidence overwhelmingly demonstrates that
petitioners’ primary purpose in acquiring and holding both the
Clark Hill and Lake Lanier properties was to enjoy the use of
those properties as vacation homes; i.e., as secondary, personal
residences. That conclusion is buttressed by Mr. Moore’s
testimony that, after petitioners’ regular weekend use of the
Clark Hill property ceased during the last 2 years of their
ownership, they allowed it to become “run down” so that it
“needed to be looked after or * * * [disposed of].” That lack of
upkeep is inconsistent with a professed intention to protect
their investment in and maximize their profit on the sale of the
property but consistent with an attitude that continued upkeep
and maintenance were warranted only in connection with
petitioners’ regular, personal use of the property.
The caselaw upon which petitioners principally rely is
inapposite. In Vandeyacht v. Commissioner, T.C. Memo. 1994-148,
we sustained the taxpayers’ deductions for expenses associated
with two oceanfront recreational properties. In that case,
however, the taxpayers never occupied the properties, a
Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Next
Last modified: November 10, 2007